Moldova’s Gas Dilemma: Compromise or Confrontation?

Sergiu CEBAN

The issue of continuing Russian gas supplies to Moldova is still hanging in the air. Right now, the authorities are choosing whether to pursue a moderate or radical path in building energy relations with Moscow

The year is ending, and part of Europe is steadily approaching an acute energy crisis. A number of countries are directly dependent on the resolution of gas transit issue through Ukrainian territory, as well as hostilities in the Kursk oblast, where the gas metering station is located. We are mainly talking about Austria, Hungary, Slovakia, and, of course, Moldova. The situation of each of these countries is different. Hungary, where Russian gas is now mainly supplied via TurkStream, is unlikely to suffer much from a possible interruption of supplies via Ukraine. Slovakia and Austria, on the contrary, will have to find solution promptly. Nevertheless, it is unlikely that anyone will have to freeze starting from January, because in case of a crisis these countries will always be able to use the reserves in the European Union’s gas storage facilities, which are filled almost to the brim. In addition, supplies of Russian liquefied natural gas to Europe continue to grow. The reasons for this are price, limited pipeline capacity, and the very fears related to the termination of Ukrainian transit. As long as LNG from Russia is not yet banned in Europe, traders are actively using this window of opportunity. But, the mills of Gods grind slowly, sooner or later Brussels will pay attention to the trade with Russia, which has not been impacted by sanctions so far. By the way, it is no coincidence that the head of the European Commission, Ursula von der Leyen, recently proposed to Donald Trump to replace Russian LNG with American LNG in order to strengthen transatlantic solidarity. The US and the EU will certainly somehow agree on cooperation in the energy sector, but what benefits will we have? Clarity on transit through Ukraine is much more important for Moldova, because its absence puts into question not so much the supply of gas to the republic as electricity. There are possible solutions for this case as well, but everything rests on technical and financial aspects. As the experience of November 2022 shows, such emergency measures can only be short-term, given the infrastructure and capacity of the regional energy system. In terms of gas fuel, the situation is more or less predictable. From July to September, the state enterprise Energocom purchased 329 million cubic meters. Most of them were sold to Moldovagaz to supply consumers and to form reserves for the coming winter. In addition, additional volumes were purchased and stored in Romania just in case. What really worries our authorities is not the prospect of extending supplies via Ukraine, but the fact that in the conditions of uncertainty Gazprom continues to ignore tenders for reserving pipeline capacities from Turkey to Moldova. The demonstrative unwillingness of the Russian monopolist to provide itself with such an alternative, as well as the “loud silence” of the Russian Federation in response to official requests from Chisinau, provoke the irritation in some buildings adjacent to the Great National Assembly Square. In order to provide for force majeure options, the government adopted a regulation and an emergency action plan for the gas sector at the end of October. The most important point, as we see it, is the priority allocation of gas to stations that produce electricity on the basis of natural gas and play a key role in the state’s energy system. However, this only partially solves the problem, because then the question of who will pay for these volumes of non-Russian gas raise. Against the backdrop of all these very vague prospects, Chisinau’s attempts to openly clash with Gazprom in the struggle for control over Moldovagaz continue. So far, this has not led to the desired result, but only to blocking the operation of the enterprise. Given the regional and global trends, it might be more rational to take a wait-and-see attitude and act more cautiously. However, it seems that not all factions within the Moldovan authorities share this logic and are quite ready to promote aggravation with Moscow. Such internal division, first, testifies to different understanding of the future model of the energy market in Moldova. One conditional group is in favor of finding a compromise and smoothly displacing Russia. The other, following the Brussels concept of “complete rejection of Russian energy resources until 2027”, is inclined to more radical actions to replace Gazprom and Moldovagaz with other regional players, mainly Romanian. Hence the discussions between our officials that have permeated the public domain. Each of these approaches has its advantages and disadvantages. In the first case (moderate), given the Kremlin’s behavior, we can say with certainty that a positive decision will be delayed until the last minute. Therefore, the Russians are most likely ready for a compromise, but they want to benefit on maximum from the current situation of uncertainty, blaming official Chisinau for the provoked energy crisis. After all, one way or another, everything that will happen in the next nine months will be focused on the parliamentary elections. In a more drastic scenario, the forecasts seem to be based on the rapid disconnection of Moldova from the Russian energy resources in order to minimize the factor of the Kremlin’s political influence and accelerate the reintegration process. Certainly, it looks tempting. But who will take responsibility if things do not go according to the pre-conceived plan? And won’t this lead to the fact that the residents of the left bank and local elites will become much more financially dependent on Moscow in the conditions of an acute energy crisis, which will affect relations between the two banks of the Dniester in the most unpredictable way? So far, nothing can be ruled out. However, there are serious doubts that Maia Sandu’s entourage will take such a risky step on the eve of a key electoral test. Surely, they realize that as a result, the system of security and stability, which has been built over several years and was one of the core components of the re-elected president’s election campaign, could easily collapse. Which party will win the governmental confrontation will become clear very soon. Conventionally speaking, if Victor Parlicov retains his position, it means that the authorities have decided to take a moderate path without a sharp aggravation of relations with Moscow and Gazprom. If there are significant personnel changes in the energy sector, it will be a sign of an accelerated scenario for the final breakup, which is fraught with serious cascading crises. Managing under such conditions will require managerial skill and serious resource investments, otherwise the consequences for the country will be rather deplorable.